Dark star: Oskar, from the film version of Let the Right One In, Lindqvist's first novel

Not many readers noticed when, three years ago, an English translation was published of John Ajvide Lindqvist's first novel, Let the Right One In, from the original Swedish of 2004. Then the film came out and the world went bananas. Tomas Alfredson's film, from Lindqvist's own screenplay, tells a beautiful, deeply horrible story about an unhappy 12-year-old boy called Oskarand his love affair with an ancient, constantly thirsty vampire child. It's one of the best recent films of any sort from anywhere, and has just been very successfully redone – as Let Me In – in a US version, so I won't spoil it except to say that the book is just as elegant although with more body horror and disgust (in the films, for example, Oskar is thin and cute and angelic-looking; in the book, he is overweight and wears a foam-rubber "pissball" in his underpants for when he wets himself).

Nowadays, people call Lindqvist "the Swedish Stephen King", and in some ways, this is right. Like King, Lindqvist writes about everyday, mainly working-class, characters and situations – the school freak, the bullies, the lonely mother, the local drunks. Like King, he is a lovely writer, plain and spare. And as with King, when it works, it works brilliantly, the human and the demonic snapping smartly together, as if they belonged that way all along: he channels the traditional vampire as a sick and desperate child, and presents the Renfield character from Stoker's Dracula as an agonised paedophile teacher.

Lindqvist has said that for him, the novel started off with his own adolescence in the 1980s on a Stockholm housing estate – Rubik's cubes, Kiss posters, Dajm bars all get their place in the story. As does the estate itself, its genius loci – "It makes you think of coconut-frosted cookies, maybe drugs . . . People must live there, just like they do in other places. That was why it was built, after all, so that people would have somewhere to live."

Lindqvist's new novel is set on a fictional island he calls Domaro, on the outer reaches of the Stockholm archipelago. Tensions run high between the native island families, most of whom fish herring for their living, and the city-dwelling incomers with their flatpack summer cottages. There are disappearances and, worse, reappearances, revenances from the dead: "We know that . . . we are damned. And we live with it. That's the way it is." The hero, Anders, is an islander who has married a blow-in and moved to Stockholm; one winter the couple come back for a visit with their small daughter, who mysteriously vanishes on the ice. Anders moves back to the island, determined to solve the mystery, only to find himself gradually taken over. It becomes as though, in an odd sense, he has never really been away.

Harbour does not entirely work. It has lovely images and tender observations, but overall the story sprawls and lumbers. A particularly frustrating element concerns Simon, a retired conjuror who keeps something very strange in a matchbox – before becoming a writer, Lindqvist himself worked as a performer of magic tricks. You get the feeling that it might just make sense on the fifth or sixth draft, but it certainly doesn't yet. Perhaps Lindqvist felt under pressure to produce another hit too quickly. Perhaps Harbour was from the outset imagined as a screenplay, visually and dramatically rich enough to hide the narrative holes.

As before, though, Lindqvist is terribly good at anchoring the creeping dread with small found objects, unlikely and yet totemic – a cartoon bear, a flapping sign, Madonna hair and Frankie T-shirts. "It doesn't go away. Nothing goes away." The 1980s are suddenly back, as the saying goes, with a vengeance: when at last we get to see them head on, the evil demons turn out to be Smiths fans, bespectacled and bequiffed and talking entirely in Morrissey lyrics. "Does the body rule the mind or does the mind rule the body?"; "I am human and I need to be loved,"; "Stop me if you think you've heard this one before." I still can't decide if this works or not – I think on balance it probably doesn't. But it's so strange, so mad, so weirdly inspirational, I can't bring myself to wish that Lindqvist had cut it out.